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Revenue Recognition
 6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
Gross-to-Net Sales Adjustments

To date, our only source of product revenue has been from the U.S. sales of Trodelvy, which we began shipping to our customers in April 2020. We record our best estimate of sales discounts and allowances to which customers are likely to be entitled. The reconciliation of gross product sales to net product sales by each significant category of gross-to-net adjustments was as follows for the three and six months ended June 30, 2020 (in thousands):

Gross product revenue$24,198  
Gross-to-net adjustments:
Government rebates(2,709) 
Chargebacks and distributor service fees(1,173) 
Sales returns and allowances(242) 
Total gross-to-net adjustments (1)
(4,124) 
Net product revenue$20,074  
(1) As of June 30, 2020, approximately $2.7 million of estimated gross-to-net accruals have been recorded within accounts payable and accrued expenses on the condensed consolidated balance sheets.​
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Everest Medicines II Limited

On April 29, 2019, we entered into a license agreement (the "License Agreement") with Everest Medicines II Limited, a China limited company ("Everest"). Pursuant to the License Agreement, we granted Everest an exclusive license to develop and commercialize Trodelvy in the People's Republic of China, Taiwan, Hong Kong, Macao, Indonesia, Philippines, Vietnam, Thailand, South Korea, Malaysia, Singapore and Mongolia (the "Territory"). In consideration for entering into the License Agreement, Everest made a one-time, non-refundable upfront payment to us in the aggregate amount of $65.0 million which was recorded as deferred revenue on the condensed consolidated balance sheets. On April 22, 2020, the FDA granted accelerated approval to Trodelvy for the treatment of adult patients with mTNBC. Also, on April 22, 2020, Everest announced the China National Medical Products Administration has approved the Clinical Trial Application for a pivotal Phase 3 study of Trodelvy for the treatment of mTNBC in China. The License Agreement contains a development milestone payment of $60.0 million based upon our achievement of FDA approval for Trodelvy. This was received in June 2020 and also recorded as deferred revenue on the condensed consolidated balance sheets. In addition, we recognized $1.2 million of deferred revenue relating to product for clinical supply during the three months ended June 30, 2020. The License Agreement also contains additional development milestone payments in a total amount of up to $180.0 million based upon the achievement of certain other development milestones. In addition, the License Agreement contains sales milestone payments in a total amount of up to $530.0 million based upon the achievement of certain sales milestones. Everest will make royalty payments to us based upon percentages of net sales of Trodelvy, ranging from 14% to 20%.

We assessed the arrangement in accordance with ASC 606 and concluded that the contract counterparty, Everest, is a customer based on the arrangement structure. We identified two material promises to deliver under the contract: (1) grant of license and the (2) clinical and commercial supply of the product. However, given the nature of the manufacturing of the product the license is not considered to be distinct from the clinical and commercial supply promise. We therefore concluded that there is one combined performance obligation.

We will recognize the total of the above deferred revenue of $126.2 million over the performance obligation period of the combined performance obligation which will be recognized over the term of the of the contract performance obligation period, which the we have concluded to be 15 years after initial sale of the product in the territory. As concluded above, we have a combined performance obligation, which includes delivering the license and clinical and commercial supply to Everest. As such, because the clinical and commercial supply obligation occur throughout the period of the License Agreement, the $126.2 million fixed consideration is recognized over the period in which commercial and clinical supply of product is delivered (over-time). During the six months ended June 30, 2020 and 2019, no revenues were recorded relating to the License Agreement.
The future potential milestone payments are excluded from the transaction price, as the achievement of the milestone events require considerable judgment in determining whether it is probable of being achieved, and that a significant revenue reversal would not occur. As such, all milestone payments are fully constrained. We will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and, if necessary, adjust its estimate of the transaction price.

Janssen Biotech Inc.
On April 5, 2019, we entered into a promotion agreement (the "Promotion Agreement") with Janssen Biotech Inc., ("Janssen") pursuant to which we would provide non-exclusive product detailing services to Janssen for erdafitinib (the "Product"). Pursuant to the Promotion Agreement, we were obligated to provide a dedicated sales team to detail the Product to oncologists and other targeted health care providers in the United States. Under the terms of the Promotion Agreement, Janssen would maintain ownership of the New Drug Application for the Product as well as legal, regulatory, distribution, commercialization and manufacturing responsibilities for the Product, while we would provide product detailing services to Janssen through March 31, 2020. Following the achievement of certain sales targets in 2019 and 2020, Janssen would pay us (a) a service fee equal to a percentage in the low double digits of the portion of Cumulative Net Sales (as defined in the Promotion Agreement) in excess of a baseline amount during each of 2019 and 2020, and (b) potential milestone payments of up to $15.0 million when Cumulative Net Sales exceed certain thresholds during each of 2019 and 2020. On April 12, 2019, we were informed that the FDA granted accelerated approval to Janssen's Balversa (erdafitinib) for the treatment of adult patients with locally advanced or metastatic urothelial carcinoma that has a type of susceptible genetic alteration known as FGFR3 or FGFR2, and that has progressed during or following prior platinum-containing chemotherapy. During the six months ended June 30, 2020 and 2019, no revenues were recorded relating to the Promotion Agreement.